USD/JPY – Yen Post Gains As Markets Eye US Unemployment Claims

The Japanese yen continues to posts gains against the US dollar in Thursday trading, as USD/JPY trades slightly above the 102 line. In economic news, there are two key events out of the US – Preliminary GDP and Unemployment Claims. In Japan, there was little change in the average yield of 10-year bonds.

Over in the US, employment numbers continue to improve. ADP Non-Farm Employment Change shot up to 215 thousand, its sharpest gain since December 2012. This was a sharp increase from the October release of 130 thousand and easily surpassed the estimate of 172 thousand. If Thursday’s Unemployment Claims has another strong reading, the dollar could make some gains. Meanwhile, New Home Sales surged in November, climbing to 444 thousand, up from 354 thousand the month before. This was well above the estimate of 432 thousand, and points to solid growth in the US housing sector.

Earlier in the week, Bank of Japan Governor Haruhiko Kuroda stated that he remained committed to the BOJ’s inflation target of 2% within two years. Although deflation has dramatically decreased, inflation indicators point to much lower inflation than the 2% level. Kuroda also said that the Bank’s ultra-loose monetary policy would continue until the inflation target was met. However, some policymakers don’t share Kuroda’s optimism that this ambitious goal will be achieved and the lack of consensus at the BOJ, as we saw in the minutes from the Bank’s last policy meeting, could weigh on the yen.

 

USD/JPY for Thursday, December 5, 2013

Forex Rate Graph 21/1/13

USD/JPY December 5 at 13:10 GMT

USD/JPY 102.06 H: 102.45 L: 101.84

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
98.92 100.00 101.19 102.53 103.30 104.17

 

  • USD/JPY has posted losses in Thursday trading. The pair dropped touched a low of 101.84 late in the Asian session but has bounced back above the 102 line in European trading.
  • 102.53 has reverted to a resistance role. Given the activity we are seeing from the pair, this line cannot be considered safe. This is followed by a resistance line at 103.30.
  • 101.19 is providing strong support. This is followed by support at the key level of 100.
  • Current range: 101.19 to 102.53

 

Further levels in both directions:

  • Below: 101.19, 100.00, 98.92 and 98.15
  • Above: 102.53, 103.30, 104.17 and 105.70

 

OANDA’s Open Positions Ratio

USD/JPY ratio has reversed directions in Thursday trading and is pointing to gains in short positions. This movement is reflected in the pair’s current movement, as the yen has posted gains against the dollar. The ratio is comprised of a majority of long positions, reflecting a trader bias towards the dollar reversing directions and moving to higher ground.

The yen has shown some improvement after briefly rising above the 103 line earlier in the week. With the US releasing key employment and GDP data later in the day, we could see some volatility from USD/JPY during the North American session.

 

USD/JPY Fundamentals

  • 13:30 US Preliminary GDP. Estimate 3.0%.
  • 13:30 US Unemployment Claims. Estimate 328K.
  • 13:30 US Treasury Secretary Jack Lew Speaks.
  • 13:30 US Preliminary GDP Price Index. Estimate 1.9%.
  • 15:00 US Factory Orders. Estimate -0.9%.
  • 15:30 US Natural Gas Storage. Estimate -141B.

 

*Key releases are highlighted in bold

*All release times are GMT

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.